The Department of Veterans Affairs was ill-prepared to treat an aging population of Vietnam veterans, and it must stand up as a new generation of vets grows older, Secretary Robert McDonald said Tuesday.

In a candid discussion before service providers, student veterans and dignitaries at the University of Montana, McDonald addressed the VA’s past troubles and what he’s done to right the ship since taking charge of the agency last July.

“I want to run this like a business, not a bureaucracy,” McDonald said. “There are changes we need to make. If we want to run this like a business, we need to treat it like a business.”

Accompanied by U.S. Sen. Jon Tester, D-Mont., who is a member of the Senate Committee of Veteran Affairs, McDonald said just 2 million veterans were older than 65 years in 1975. That’s expected to increase to 10 million by 2017.

McDonald said the VA wasn’t prepared to treat the surging population of aging vets. Patient wait times increased to staggering levels as a result, and some VA officials cooked the books to cover the truth.

“What really hit the VA in 2014 was Vietnam,” McDonald said. “The VA was not ready. It has been, in my opinion, underfunded. It’s their own fault because they said they had enough (money).”

McDonald recently requested a 6.5 percent increase in VA funding. He’s also seeking the flexibility to move money between programs within the VA as needed.

He said that not being able to operate the agency as a business – flexible to needs and changes – isn’t a model for success. McDonald is the former CEO of Proctor and Gamble.

“I have a number of line items and I can’t move money from one account to another,” McDonald said. “It’s the lunacy of government. There are changes we need to make, and Senator Tester is very supportive.”

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Under new leadership and with time and distance between the 2014 scandal, McDonald said the VA must become more patient-centric and not repeat the problems of the past.

Veterans of Iraq and Afghanistan will soon become the agency’s next wave of patients. The VA is working to hire more doctors and nurses, and expand its outpatient clinics to deal with the future.

It has hired 8,500 employees, including 1,800 nurses and 900 doctors since McDonald took office. Better staffing and clinics are needed to prepare for future patients.

“While Iraq and Afghanistan are ending, it’s not ending for the VA,” McDonald said. “I was in the 82nd Airborne (Division) and I’m missing the disks in my lower back. It didn’t bother me when I was 28, but I’m 61 now and I can’t sleep at night. It’s something we’ve got to get a handle on – thinking of the costs of war not only now, but 40 years later.”

In a session that lasted nearly 90 minutes, McDonald established a strong rapport with veterans in the audience. He took questions personally and offered his candid response.

He also directed his staff to meet one-on-one with several men and women who brought their own problems to the meeting. The issues ranged from the GI Bill to a Navy veteran who said she was sexually assaulted in the service.

McDonald also broke down the VA’s budget, which now sits at $180 billion. The agency spends around $47 million on the Post GI Bill and $58 million in compensation benefits for some 3.9 million people.

When he took the position, McDonald said some conservative congressmen questioned the need for the VA. But McDonald insists the need is greater than ever.

“The three legs of the VA include research, teaching and clinical care,” he said. “If you took away any one of those legs, the stool would fall over, and I would argue the stool of American medicine would fall over.”

Also on Tuesday, Tester announced a $6 million grant to the Volunteers of America Northern Rockies to help end homelessness among veterans.

Since 2012, the organization has worked with more than 200 veterans and their families to help provide services for homeless and at-risk veterans.

“The Volunteers of America Northern Rockies are doing great work with our veterans and their families,” Tester said. “These additional resources will help them continue to fight for our veterans and get them back on their feet.”

Tester has brought three VA secretaries to Montana in past years. He was particularly pleased with McDonald’s candor and willingness to discuss the problems and cures.

“In all my years in the Senate, I’ve never worked with a Cabinet secretary who took free-for-all questions from the audience for 45 minutes,” Tester said.

McDonald said changes within the VA would continue to unfold.

“We’re going through the largest reorganization we’ve ever done,” McDonald said. “We have no hope of taking care of veterans if we don’t take care of employees. We’re putting in place a culture of continued improvement.”

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